Answered Essay: Financial ratio are just numbers, they do not tell you what is really going on in an organization."

“Financial ratio are just numbers, they do not tell you what is really going on in an organization.” How would you respond to this statement? Please discuss

Expert Answer


Financial ratios are not just mere numbers as they are used in evaluation of overall financial condition of an entity. They provide realtionship between signficant numbers such as operating expenses to revenue, assets to turnover which helps the organisation to evaluate the performance and also these ratios can be used to compare current performance with previous year’s performance.Such comparison also helps the organisation to analyse the deviations from standard performance and take better decisions.

Following are some ratios which depict the performance of the entity:
1. Gross Margin Ratio = Gross profit/Net sales
2. Operating Margin = Operating Income/Net sales
3. Return on equity = Net income/Shareholders equity
4. Return on Assets = Net income/Total Assets
5. Current Ratio = Current Assets/Current Liabilities

In addition the banks and financial institutions in order to provide loan facilities evaluate the performance of the company based on the financial ratios.

Hence, from the above we can conclude that financial ratios provide details about whats going in the organisation and are not just mere numbers.

Buy Essay
Calculate your paper price
Pages (550 words)
Approximate price: -

Help Me Write My Essay - Reasons:

Best Online Essay Writing Service

We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.

Our Writers are Experienced and Professional

Our essay writing service is founded on professional writers who are on stand by to help you any time.

Free Revision Fo all Essays

Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.

Timely Essay(s)

We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.

Customised Essays &100% Confidential

Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.

24/7 Customer Support

Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.


Let us write that nagging essay.


Submit Your Essay/Homework Instructions

By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.


Pick A & Writer

Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.


Editing (OUR PART)

At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.


Receive your Paper

After Editing, your paper will be sent to you via email.

× How can I help you?